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Pressures on councillors to not budge an inch on viability

No subject raises more dispute around housebuilding than viability assessments, which allow market housing to be built with few affordable housing units. This week housing charity Shelter has called on the government to “close the viability loophole”.

As most developers know, the subject is inevitably more difficult than housing campaigners would like. Planning obligations requiring affordable housing in market housing developments only started in the 1990s, a time when house prices were rising but the government did not want councils building their own homes.

From circular 1/97 onwards, the government told planning authorities not to require contributions that would make developments financially unviable; viability is not the ambiguity in the law suggested by the word “loophole”. In circular 05/05 the government suggested “use of independent third parties” might help work out when that would happen: the viability assessment was born before the recession.

It was only when the recession struck, with housing developers taking one of the biggest hits, that a large proportion of new developments started to be accompanied by viability assessments arguing that affordable housing policy requirements could no longer be met. The government also agreed to relax the definition of viability and allow renegotiation of previous signed agreements made unviable by market changes.

It should be of no surprise that councils, facing pressure over their own legal duty to find affordable homes, should fight against any possible reduction. In many cases the councillors are being pressed not to yield an inch by constituents and local party activists, who rarely have intimate knowledge of planning law or development finance.

What does it mean for developers? If the development itself is unwelcome then councillors are growing increasingly willing to simply vote them down rather than be criticised (and possibly facing deselection) for “selling out to developers”. More far-sighted or secure councils now routinely add review mechanisms so they can be assured of increased contributions from developments that proved more profitable at completion. When this happens developers should not be shy of making committees aware of the review.

Probably the most difficult aspect of viability is over confidentiality. When circular 05/05 made clear that “in cases where a dispute relates to the viability of a proposal the independent third party might have access to financial information provided by the developer on a strictly confidential basis”, its drafters may not have anticipated the way it would look like councillors and developers agreeing secret deals.

In an era of investigative bloggers, leaks and Freedom of Information legislation, perhaps no-one should have given high odds for viability assessments staying confidential. A three year campaign in Southwark over the Heygate estate regeneration ended in 2015 with most of its assessment (and the council’s scrutiny of it) being disclosed. Now councils are requiring applications to include a viability assessment which can be published.

Unless a sudden change lifts the housing market and makes development suddenly more viable, concern about viability assessment will not go away. Developers seeking to get planning permission on schedule and for viable developments must take account of the pressures on individual planning committee members. Talking to communities well in advance of submission always helps.

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Smooth operation

Many thanks for last night: a very smooth operation!

Message was very welcome

Was a great result – especially to receive unanimous approval! Many thanks also for you and your team’s work in the run up to the committee. Getting those messages across really helped and was evident by the feedback given by members on both sides of the political spectrum … notably on the successfully engagement with residents and how the scheme responded accordingly. Message was very welcome!

On point

Harry was on point and has been the whole way through. We are all very chuffed. We are already preparing for another rather testing application on another site and you can be certain that we will engage you

Appreciated

Thanks Richard, your help has been much appreciated. Will let you know when the next job comes up!

Big guns!

Thanks for your and the team’s help. It was good to know we had the proverbial big guns in our armoury!

You kept calm

Many thanks for that: your team did very well, and kept a lot calmer than me! Matt was a sensible wise head, as was Alex, but he also made me think succinctly for the questions and how to answer, which is a great skill to try and acquire. Especially for someone as verbose as me!

A unanimous approval

Councillors praised both officers and the developer on their work and engagement.

A unanimous approval 5-0

With your help

Really pleased to hear the news this evening

With your help, we got it through !!!!

Best Regards!

Truly excellent example

Great news that we approved 60 houses on green belt last night.

It was tremendous that the Chair said that this was a “truly excellent example of good consultation…”

Gave me more confidence

Thank you – we were both somewhat surprised given the level of objections but in fact the committee hardly discussed the scheme at all before consenting it.

Thanks to your team for preparing me well for the committee which certainly gave me more confidence.

A big relief

Thank you. A big relief. As I am sure you can appreciate, we are delighted!

Your team did a great job, especially Matt who was integral.

I look forward to catching up soon.

Unanimous

196 flats approved unanimously, thanks to all involved.

Professional and effective

I wanted to thank you and all at Thorncliffe for managing the consultation process so professionally and effectively. This, without doubt, played a crucial role in gaining the approval.

Once again, all our thanks.

Was a good result

Cant remember the last time I got anything through unanimously!

Was a good result, it’s the right scheme for the site and of course we had a great team including yourselves working on it,

First class troops

Richard. Your troops did a first class job as always. Many thanks

Praise for communityUK

Well done for the way you presented tonight’s online consultation. I thought it was an excellent format.

Great result last night

I just wanted to say thank you again for all your help with the great result last night.

You have been tremendous and it is much appreciated.

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